SBI says will take call on rates soon

The State Bank of India (SBI) said it will decide on reducing lending rates in a day or two for the benefits of borrowers.

“Our Asset Liability Committee (ALCO) will meet shortly to review interest rates. Transmission of monetary policy to surely take place,” SBI Chairman Pratip Chaudhuri told reporters here.

“Definitely, on interest rates there is a downward bias which is very supportive of growth. I am happy that RBI has taken into account our persistent request to do away with CRR,” he said.

The bank can either cut base rate or reduce interest rate in some segments, he said, adding, the bank will pass on the gain to customers. The monetary policy action will unlock Rs 2,500 crore for SBI and there will be savings to the tune of Rs 200 crore.

Asked about the second quarter expectation, Chaudhuri said “September quarter end result should be good. So far in August our net interest margins are on target.” In terms of loan losses and asset books, it looks a lot can happen between now and September, he said, adding “worst is over for asset quality.”

For the first quarter ended June 2012, SBI reported a 137 per cent jump in net profit at Rs 3,752 crore compared to Rs 1,583 crore in the same quarter of the previous fiscal.